Gujarat annual Plan fixed at Rs 59,000 cr

After Andhra Pradesh, Gujarat has raised the issue of pricing and availability of coal and natural gas in a meeting with the Planning Commission. The annual plan for the Gujarat has been fixed at Rs 59,000 crore, higher by 15 per cent from the previous year.

GAS, COAL PRICING

According to sources, Gujarat Chief Minister Narendra Modi, in his meeting with Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, asked why State utilities of Gujarat have to pay more for the gas and coal produced in the State.

Modi also point out that the Gujarat units are given priority in the allocation of these locally produced fuels. But, ironically, units from outside the State get fuel not only at a cheaper price, but also on priority. Montek is understood to have said that the Planning Commission will take up these issues with the concerned departments. At the same time, he is also believed to have said that price revision of gas and coal can provide a solution to this issue.

After the meeting, Modi announced that Planning Commission has approved Rs 59,000 crore plan for Gujarat, compared to the Rs 58,500 crore sought by the State. However, he sparred with the Centre over social sector development in the State, as he countered the Planning Commission’s assessment that lot more needs to be done.

In the presence of Modi, Ahluwalia said Gujarat needs to do more in social sectors. “There was a lot of discussion on the social sector. I think generally it has been our view that Gujarat needs, in order to bring its social sector performance up to the economic size, to have some special attention to this area,” he remarked. When his turn came, the Gujarat Chief Minister retorted back saying the State spends 42 per cent of its budget on social sector with a moto of “Sabka Saath, Sabka Vikas.”

Bharti Airtel’s arm enters into tie-up with J&K Bank

Bharti Airtel’s subsidiary - Airtel M Commerce Services (AMSL), has entered into a tie-up with Jammu and Kashmir Bank to offer ‘airtel money’ services through the bank’s 800 Khidmat Centres across the state. Through airtel money, the users can load cash on their mobile devices and spend it to pay utility bills, recharge mobile phones, shop at merchant outlets and transact online.

Besides, this alliance marks a unique joint commitment by both the companies towards taking the power of ‘airtel money’ to the masses and further promotes the nation’s financial inclusion agenda.

J&K Bank has taken the Khidmat Centres e-governance project to make information and knowledge reaches all corners of the state as well as to ensure growth for both urban and rural sections of the society.

Increased oil, coal output and restraining gold consumption can contain CAD: FM

In order to  increase production and contain the current account deficit (CAD), Finance Minister P Chidambaram said, the country should get its policies and priorities right as long-term measures and the only way to contain CAD is to increase the domestic production of oil & coal and restrain the consumption of gold.

Chidambaram said the main reason for India's large CAD is that the country has huge dependence on import of certain items like oil, coal and gold. Touching a record high of 6.7% of GDP in the third quarter of 2012-13, India’s CAD is likely to be around 5% in the 2012-13 fiscal. Further, high CAD is also impacting the domestic currency, which recently fell to its lifetime low level of over 58.90 against dollar.      However, as per the apex bank - RBI, India can sustain CAD of around 2.5%.

However, finance minister is of view that India continues to remain a desired destination for FDI and FII, despite recession in major economies. By adding further he said, in spite all probability the government was able to finance the CAD and also added around $3 billion to the forex reserves in 2012-13 and expressed confidence that in 2013-14 also CAD will be financed without dipping into reserves.

Gold could rule flat, pausing for US Fed meet.

Gold prices on domestic and futures market are likely to rule flat on Tuesday as the market looks for direction from a key meeting of the US Federal Reserve. But investors continue to be bearish, further paring their holdings in electronic formats on gold exchange-traded funds.

The US Federal Reserve meets on Tuesday with speculation rife of an imminent paring of pumping cash into the economy. The US Fed buys treasury and other bonds worth $85 billion every month. The speculation has already resulted in the dollar gaining. The movement of the rupee against the Greenback will also have a say on how gold behaves since a weak rupee results in commodities such as gold, crude oil and vegetable oils turning costlier.

In early Asian trade in Singapore, spot gold ruled at $1,384.72 an ounce, while gold futures maturing in August quoted at $1,384.
In the domestic market on Monday, gold for Jewellery (99.5% purity) slipped to Rs 27,840 for 10 gm and pure gold (99.9% purity) to Rs 27, 985.

On MCX, gold August contracts could range between Rs 27,800 and Rs 27,900.
Meanwhile, holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, dropped to 1,003.17 tonnes on Monday, the lowest in 52 months.

Crude Oil

Fears that stockpiles in the US could be lower are likely to drive crude oil up in almost all markets on Tuesday.

It was reflected in early Asian trade where Brent crude for delivery in August was up at $105.59 a barrel, while Western Texas Intermediate crude July contracts rose to $97.84 a barrel.

Oils and Oil-seeds

The oils and oilseeds complex will head lower despite Malaysia reporting higher exports. This is because the weather in the US is conducive to planting more soyabean, while Indian monsoon’s progress is seen positive for soyabean and other oilseeds.

Chicago Board of Trade soyabean for delivery in November quoted at $12.90 a bushel, while crude palm oil in Bursa Malaysia Derivatives Exchange to be delivered in August rose to 2,475 ringgit ($784.5) a tonne in early trade.

Grains complex

Though wheat and corn (industrial maize) slipped last night on favourable weather for the US crop, in early trade CBOT wheat for delivery in September rose to $6.85 a bushel, while corn for delivery in December quoted at $5.40 a bushel.

Rubber

With Thailand, Indonesia and Malaysia, the top three rubber producing nations, not able to decide on curbing exports, rubber is headed lower on fears of supply glut.

On the Tokyo Commodity Exchange, rubber for delivery in November fell to 235 yen or Rs 144 a kg.

Nikkei turns down as market wary ahead of Fed outcome.

Japan's Nikkei average reversed early gains on Tuesday, underscoring the volatility that has roiled the market lately, as investors awaited the outcome of a Federal Reserve meeting for clues on whether it will continue to support the US economy.
 By the midday break, the Nikkei slipped 0.7% to 12,941.80 after trading as high as 13,139.48. It climbed 2.7% on Monday, lifting the index out of a bear market.
 Many investors have been cutting their long Japanese equities and short yen positions on concerns that the Fed will scale back its stimulus this year and after the Nikkei had rallied more than 80 % from mid-November to its 5-1/2 year peak hit on May 23. Since then, trading in Japanese equities has been extremely volatile.

Disappointment over a growth strategy unveiled by the Japanese government recently and worries over slowing growth in China have also contributed to the market tumult.

Underscoring the volatility, since May 23 the Nikkei has had 15 sessions where intraday swings exceeded 2.5%, compared with 16 such trading days for the year up to May 22 and four such days in the whole of 2012. The U.S. S&P 500 only has had one such trading day in 2013, and the Euro STOXX 50 index has 11.

WABAG BAGS INR 262 CRORE ORDER FROM NEPAL.

 VA TECH

WABAG LIMITED, a leading Indian MNC, in a joint venture with Pratibha Industries Limited has won an INR 262 crore order from Melamchi Water Supply Development Board, Nepal. The scope of work comprises
construction of Water Treatment Plant at Sundarijal, Nepal which will
have an initial capacity of 85 MlD and will be designed to be expanded to 170 MlD, and to 510 MLD
at a later stage. The water treatment plant at Sundarijal is part of the Melamchi Water Supply
Project, under the auspices of the Melamchi Water Supply Development Board (MWSDB). The
project has been funded by the Japan International Cooperation Agency (JICA).This Project will treat
water from the Melamchi River and discharge the treated water through pipeline upto battery limits.

  The WABAG Group represents a leading multinational player with a workforce of over 1,500 and has
companies and offices in more than 20 countries. It disposes over unique technological know-how,
based on innovative, patented technologies and long-term experience.

Sensex up 139 points,Capital goods, healthcare stocks major gainers.

Though RBI Governor D. Subbarao played safe keeping the CRR and repo rate unchanged, the stock market took the shock in its chin as it was more or less anticipated.

The Reserve Bank of India, in its mid-quarter monetary policy review, has kept the repo rate unchanged at 7.25 per cent and cash reserve ratio at 4 per cent. It has also left the reverse repo rate unchanged at 6.25 per cent.

At 1.25 p.m., the 30-share BSE index Sensex was up 82 points (0.43 per cent) at 19,259.93 and the 50-share NSE index Nifty was up 25.4 points (0.44 per cent) at 5,833.80.
On the BSE, capital goods and healthcare stocks were the major gainers and were up 1.07 per cent and 0.86 per cent, respectively, followed by consumer durables 0.84 per cent and auto 0.81 per cent.

On the other hand, metal and PSU stocks lost investors' support and were down by 0.16 per cent and 0.12 per cent, respectively.

Among 30-share Sensex, M&M, Sun Pharma, Bharti Airtel, HDFC and BHEL were the top five gainers, while the top five losers were Tata Motors, Hindalco, Sterlite, Dr Reddy's and TCS.

No change Policy....RBI keeps the rates unchanged.

Reserve Bank of India (RBI) keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0
per cent of their net demand and time liabilities; and
 keep the policy repo rate under the liquidity adjustment facility (LAF)  unchanged at 7.25 per cent.
 Consequently, the reverse repo rate under the LAF will remain unchanged at  6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.25 per cent.

Nifty slips 33 points down trading at 5775, Sensex losses 80 points.

Points considered in Policy:
Global economic activity has slowed and risks remain elevated, most recently on account of uncertainty over policies of systemic central banks. On the domestic front, macroeconomic conditions remain weak, hamstrung by infrastructure bottlenecks, supply constraints, lacklustre domestic demand and subdued investment sentiment. Inflation has moderated as projected. However, upside pressures on the way forward from the pass-through of rupee depreciation, recent increases in administered prices and persisting imbalances, especially relating to food, pose risks of second-round effects.

Global growth has been patchy and uneven. Among advanced economies (AEs), during Q1 of 2013, growth in US and Japan improved while that in the euro area contracted. Growth in most emerging and developing economies (EDEs) has been relatively resilient, although in some large emerging economies, sluggish external demand and stalled domestic investment are dragging down economic  activity. Inflation has been easing in the AEs due to weak demand conditions.
EDEs, however, present a mixed picture: inflation remains elevated in the BRICS except China. Commodity prices, other than the price of crude, have generally softened in recent months.

Eye on Mahindra & Mahindra

Shares of Mahindra Forgings Ltd and Mahindra Composites Ltd may continue to trade with positive momentum. The promoter-Mahindra Group-announced a share swap under which it will hand control of its domestic components business to the Spanish company. The Spanish company announced an open offer, which is at a premium to Friday’s closing price of the target companies.
Mahindra & Mahindra is an Indian automobile manufacturing corporation,It is one of the largest vehicle manufacturers  by production in India.

MNM trading at Rs.968, opens at Rs.961.20 up by 2.29% from Friday's closing Rs.947.45,
Mahforg trading at Rs.69.25 up by 3.66%  from Friday's closing Rs.66.85,
Mahincomp is locked under upper circuit of  Rs.34.45.

Central banks could hold sway over markets

Actions of two central banks could determine the direction of Indian stocks in the week ahead. While the Reserve Bank of India (RBI) decision on policy rates is likely to set the tone for domestic stocks this week, the outcome of the US Fed’s two-day meet ending Wednesday — which could give some clarity on its monetary policy outlook — could have wider implications on  global financial markets.

   Hopes of a policy-rate or repo rate-cut by RBI have diminished following the recent decline in the rupee against the dollar. So, if the Indian central bank keeps the repo rate (at which it lends to banks) intact, markets would not be disappointed, said fund managers.

 After RBI’s meeting, investors will closely watch the US Federal Open Market Committee meeting. If Fed chairman Ben Bernanke signals that the US central bank might cut down its bond buying programme known as Quantitative Easing 3 (QE3), it could weigh down sentiment in emerging market equities including India’s. The liquidity from QE3 has made its way to equity and bond markets worldwide.

       Investors, however, think RBI might cut the cash reserve ratio (CRR) — the minimum amount banks need to hold with the central bank, to ease liquidity.

“A CRR cut of 25 bps is what some quarters of the market are looking forward to,.“With the declining rupee situation, high current account deficit numbers, markets are not expecting a repo rate cut.”